James Burnham and Our ‘Soul-Sick’ Elite: A Conversation with Julius Krein

Comes now to Liberty Law Talk, Julius Krein, founding editor of the explosive new journal, American Affairs. We discuss the crack-up in our politics and in the conservative movement through the lens of James Burnham’s classic work, The Managerial Revolution.

Followed by the comment here repeated (which may apply to critical points of Mr. Krein’s essay):

This is a fascinating piece; largely for its inferences about “managers” (as a class), an “elite” in a social order, and the roles of each. It stimulates reactions (best stated as questions, but open to expression of perspectives).

Who and what are “managers” and what are their various functions in social orders? For some perspective we might look at James Burnham’s ” The Revolt of the Managers;” written about the same time as Eliot’s essay.

Who comprise the “elite” and what are their characteristics, which make them elite? Do we, in fact, now have an elite?

From experiences we observe that social orders, in the natural process of organization, develop “elites.” Looking back over prior periods we can identify and describe characteristics of their memberships; and, to some extent conjecture how they evolved. We might also observe particular functions of those elites and consider whether we may not sometimes err in presuming that in simply performing functions formerly conducted by members of the elite certain persons or groups have the status of an elite.

Mr. Reinsch postulates that elites “rule.” Another perspective might be that elites do not “rule,” but rather preserve, enforce and provide for alterations of the rules spontaneously generated by the social order of which they are members. That function requires that this sense of obligations of the membership of the elite is always at least marginally greater then their sense of entitlements. From that perspective it would seem important to understand that sense of obligations (and the nature of the obligations themselves).

From that viewpoint, the fall of the elites begins and accelerates as a sense of entitlements exceeds the sense of obligations, and no new membership can be constructed or arise unless and until it’s membership attains
a necessary level of a sense of obligations.

Administrators (in government and public facilities) acting as managers largely function as intermediaries; and while many members of a “managerial class” might as Speier to membership in an elite, the nature of their functions do not augur well for that prospect. That is equally true in finance, industry and general business. Little in today’s observations would support an assertion that administrators constitute an elite (although many might aspire to that status).

What we can take from Eliot’s essay is that the formation of the motivations for a sense of obligations arise in the family and are carried through from ideologies, religion in particular. We might draw the inference that we have not developed a replacement class of elites during the long period of secularization that began at some point in the very early part of the 20th century, and heavily impacted Eliot’s reactions.

Whether it will require a return to former ideologies and religion, or the development and evolution of new ideologies and beliefs in order to establish a true elite with its true functions remains to be seen. In the meantime we have been observing the splintering of what have been the long evolved rules of the social orders of Western civilization as the previous elites have dropped away and their functions been replaced by secularization, intellectualism and rationalization.

It is perhaps more likely that the continuing fragmentation of social orders in Western civilization have given rise to more roles and functions for administrators and managers at many more levels of human interactions, especially those through governments. That is far more likely than any disintegration of the “managerial class,” whose functions continue to expand.

Observations on what appears from the content and tenor of Kreiner’s article:

While not explicit, it seems that his concept of “Capitalism” is one of a “system” rather than a “resulting condition.” In another perspective capitalism is a condition that results from specific relationships amongst individuals and groups for divergent or common objectives, acting with varying ranges of means and capacities for their selection, in particular circumstances.

While that is largely true of much social activity, in the case of “Capitalism,” the objectives are largely concerned with the acquisition or preservation of durable assets, resources, or capacities (“Capital”) for further production of additional surpluses for deferred consumption, ameliorations, gratifications (including preeminence). Marx, as differentiated from Marx-ist, concerned himself with the historical evidence of industrialized societies predominant use of surpluses to increase further production. Krein’s article seems to echo Burnham’s (Marx) concept of the control and predominant use of surpluses.

In past comments the historical evidence of the following sequence of historical resulting conditions of “Capitalism” has been noted:

Each of those were conditions resulting from particular relationships and particular circumstances in overlapping periods in the development of what has come to be Western Society.

At this point let us digress slightly to deal with and another concept, “Property,” which seems crucial to Krein’s perspective. It seems he regards Property as tangible and intangible materials substance. If we sort of “back away” for a perspective, “Property” can be understood as a *relationship* of individuals or groups with material substances (tangible and intangible). That change in perspective would alter the view of “control” of the use of property to the “power” to influence a particular relationship. The “management” of tangible and intangible materials is, of course, quite distinct from management of relationships and of the circumstance in which they occur; though both forms exist.

Back to “Managerial Capitalism” and the possibility of a “Managerial Elite,” as addressed by Krein; he elides through the evolving diminutions of proprietorships as “withdrawal” of owners from direct control (and management) of productive and distributive enterprises. [Strangely, “distribution” is not dealt with in Krein’s essay, even though our economy might be regarded as a “developed distributive economy.”]

Burnham, of course, acknowledged the seminal observations of Berle & Means; of which, Krein is no doubt well aware. Examination of each of the historical phases of capitalism in Western Society, particularly our own, will probably disclose not a “withdrawal,” but a progressive evolution and development of needs for new facilities (instrumentalities) and relationships as technologies and the availability of ambient energies became available and subject to mastery, adding to human potential.

Here we come to the “evolution” of the “Managerial Class.” Though probably not his conclusion, some might conclude from Krein’s descriptions that the managerial class descended upon our society like some Teutonic horde, fully armed and motivated. It can better be seen as a class within society developed over periods through spontaneous order to meet particular needs and serve specific functions within the society. Those needs and functions are encompassed within the requirements for intermediations in relationships. How did our society come to develop increasing requirements for intermediations; which in turn have given rise to a “Managerial Class?”

We might take a look at the work of North, Wallis & Weingast (NBER Working Paper 12795 – 2006) [Violence and Social Orders – Cambridge 2013] on the subject of “Open Access” social orders. As a social order provides open access for its members to form associations and relationships and access to resources for their objectives, relationships become less interpersonal and more impersonal and create needs of various degrees of intermediation in those relationships by virtue of the fact that they are no longer interpersonal. Beginning about 1820 American society began to enter the stage of an “Open Access” society, which by around 1840 was in full swing (but, since around 1913 – 19 has been increasingly constrained as we have approached what is today a “Managed Society”).

So our society spontaneously developed – intermediary functions – that resulted in the creation of a “Managerial Class.”

However, that does not confirm the existence of a “Managerial ELITE.” Perhaps in such a conversation Julius Krein could identify the characteristics or qualifications of membership for “Elite”. Unless we accept that possession of some degree of power, influence or control is sufficient to establish elite status, it is difficult to accept that there is a “Managerial Elite.” That is not to deny the existence of a management class; nor to deny the power and influence of its members.

There is more to be said about the functions of the Managerial Class in the Federal Administrative State and the clashes of those functions with the functions of the Managerial Class in the production, distribution and other social functions of our society. But, this critique is already a bit long. Mr. Krein’s views on those managerial class conflicts (“business managers” vs, “government administrators”) would make a great contribution here, as would his thinking on the questions pointed out above.

“Mr. Krein’s views on those managerial class conflicts (“business managers” vs, “government administrators”) would make a great contribution here, as would his thinking on the questions pointed out above.”

As this is a re-post of your earlier comments, I understand the thrust of the request contained therein. From the podcast, I am of the impression that Krein’s would re-shape the implied question. Krein argues that much “business” manager activity is specifically oriented toward an *accomodation8 with the Federal managers; hoping to anticipate Federal interventions, to shape those interventions AND, in some instances, e.g., Big Pharma and Medicare reimbursement schedules, to both produce and induce “consumption” based upon defined and “acceptable” profit margins / returns on capital investment.
It would seem that Krein observes less conflict between the different managerial classes, Business vs Federales, than is otherwise supposed by both the Left and the Right, more particularly by the Conservative academy and commentariat, both of which cling to the outdated precepts of a Lockean / Smithian market economy. This conclusion and subsequent observation by Krein follows naturally from an understanding of Burnham’s insight(s) and the rise of a managerial class. Markets may no longer be said to be *free* – they are *managed*
Accompanying this change to a managed market economy is the transition to, as you say, managed intermediations amongst the citizenry. It is a phenomenon insufficiently remarked upon that both the transition to a managerial class for business COINCIDED with a transition to managerial class for “governance.”
Did Wilson (via the German School influence) ape the industrialists – managerial nexus; or was the industrialist – managerial nexus spurred on by the corresponding transitions evident within the governing mechanisms.
Suffice it to say, that the growth of each was a) roughly concurrent, b) predicated upon a need for a more *expert* / scientific approach, c) a not unreasonable option in the face of rising complexity and d) has proven unsatisfactory, in both, and by the “consumers” of these functions, i.e., the citizenry.

Perhaps, it is because of the unsatisfactory outcomes for each that there would appear to be significant efforts at cooperation between the different managerial classes. It would appear that they require the existence of each other to continue to justify their respective command of the economy or of government functions and mechanisms.

Krein also touches upon the notion of “obligations”, although not stating it as such, and ideology and while not so clear on these elements as are you, he rather concisely presents a similar argument in his discussion of the dissolution of the connection between the “national interest” and the command of the productive forces of the economy. This strikes me as quite right! Consider: John D Rockefeller, in defense of Standard Oil, is reported to have said, (paraphrase here) “I [we} built an industry, an American industry, employing thousands….). JP Moragn, in the face of a potential devastating crash of the stock market, injected millions upon millions in order to prop up that market (and helped finance WWI). Contrast those Barons with our current Barons (every bit as much “robbers” as well); Tim Cook of Apple will not assist his government in tracking / preventing possible terrorists; Starbucks will defy the law and hire 10,000 illegal immigrants, etc. etc.

It is this same loss of the sense (requirement?) of obligation to both the national interest and one’s fellow citizens that binds both the business managerial class and the political managers of this nation.
Krein is again correct when he argues that Conservative free market types are just as guilty of a “loss of obligation” as are the Progressives and the Federal managerial class. To hear our libertarian / conservative friends, we would be better off with unlimited immigration, globalized trade (whether fettered or unfettered – fair or unfair) than with a business managerial class that actually puts its *idle* / un-invested capital to work within and for the national economy and its citizens. How closely does this mindset match that of our political managers.

Any wonder why the two may now be observed to “cooperate”?

This is not to say that there is no conflict between the two, as there is and always will be some source of friction as each element seeks to maximize it’s own “internalities” / power.
But it may suggest that rather than a destruction of the managerial class, it may represent a new evolution, a merging, if you will, of the two classes. I would liken it to Michael Greve’s concept of “cooperative Federalism” – only writ larger as it would encompass the entire economy AND the interrelationships of the citizenry.

But I sense something more than mere *crony capitalism* which would typically self limit its concerns to the attainment of certain economic advantages. Here, we observe a simultaneous parasitic and symbiotic relationship wherein both parties would appear to require the presence of the other for the sometimes similar and sometimes divergent goals, e.g., the ideological goals and internalities of the FAS factotems vs (or in conjunction with) the economic goals of the “cronyists” while both factions desire / strive for greater sway over their sectors of influence. At times, this is reducible to a simple “give and take”, a wink and a nod, perhaps, as well; yet, the end result is a further consolidation of power / influence within these two factions.

A simple case in point: GE and the incandescent light bulb *scam* wherein GE purports to recognize the EPA’s ability to a) recognize a threat to the environment, b) develop a clear policy to remediate that threat and c) an alleged “granted power” to regulate it WHILE GE conveniently helps craft the regulations such that GE, as a corporate entity, will benefit and drive competitors from the market. Incidentally, in this instance, both may be said to be ‘virtue signalling’ their concern for the environment AND BOTH benefit from a public persona of “responsible” corporate or agency citizenship.

So, Yep – it is cronyism – but i think we are (have) evolving into something more.

There is another element that must be considered when discussing the “managerial elite (or class)” – the NGO’s and the peculiar role that they play and occupy in our current politics, as well as the self-perception of the NGO ‘s personnel of themselves as members of this managing class.

In examining this particular nexus, we are more likely to observe the ideological symbiosis of which i spoke earlier.

One wonder’s where would Krein place the NGO’s in this scheme?

One other thought: It is also here where we observe the most “apish” affectations of a sub-class miming the behavior and attitudes of an “Elite” – surely, they see themselves as part of the elite – in much the same way as the *downstairs” staff at Downton Abbey so closely identified with their noble masters.

I think Julius Krein needs to re-release Burnham’s Managerial Revolution and The New Machiavellians with a new expanded preface show why the book matters right now and explain the ways Burnham hit on the head the issue of elites whose shared benefit from globalism make them an interesting who’s interest is at odds with the middle and lower classes of the developed nations.

The Managerial Revolution was reprinted in the early 90s by some little press and the New Machiavellians was a Regenry Reprint in the early 80s…..

Burnham was an incisive observer who understood the multiplicity of factors that gave rise to certain conditions (relationships and the circumstance in which they occur) and might provide indicators of further developments in conditions. Like Marx, whose scholarship and analysis he followed closely, he was imbued with historicism; but, that tendency seems to have become less over-riding over time.

A major Burnham insight, as Krein notes, and one that Schumpeter did not, is that the same factors are effective (if to different degrees or in different ways) in the development (evolution) of a social order and in its “economy.” The two do not develop from totally different factors.

We are better off reviving natural rights as a useful explanation for some of our constitutional virtues, but to counteract the crisis of modernity we need to explore other explanations of our Constitution.

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